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Self employed & Benefits

miaow76
  • 19 posts
  • # 84198

Hi,

I met with a potential new client today.  She is currently claiming income support and has been for about a year, whilst training to become a therapist.  5 weeks ago she got her first client and is just about to get another 3.  She has NOT registered as self-employed (yet) but has declared the income she has received over the last 5 weeks at the Jobcentre.  She is allowed to work up to 16 hours a week whilst claiming income support.  

I'm nowhere near an expert on benefits, but I'm pretty sure she should have registered as self employed by now.  She did ask at the Jobcentre when she declared the income and they were about as much use as a chocolate fireguard!  I’ve been trawling through the HMRC and Directgov websites for a definitive answer and I can’t find one, other than on the HMRC website that says you must let HMRC know as soon as possible. 

My worry is one, that she has delayed registering as self-employed and two, that when she does register the dates will not match up with when she has declared a self-employment income at the Jobcentre. 

Has anybody got any experience with self-employed clients claiming benefits?  And can anyone point me in the right direction to get clarification on the query with the delayed registration, even if it’s that I should tell her to ring HMRC.


Thanks
Kate
  • 794 posts
  • # 84205

Hi Kate,
Your client will have to register as self-employed and my understanding is that it has to be done within the first 3 months of starting Self-employment. She will then be issued with her Unique Tax Reference (UTR) which she will need to complete her Annual Tax Return. I know someone who is in the same position and that is why I can advise you - the only difference is they are on disability allowance. She should tell HMRC the correct date and she can register online.
Hope this assists.
Regards,
Marilyn   

  • A clever person solves a problem.

    A wise person avoids it.

    Albert Enstein


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miaow76
  • 19 posts
  • # 84208

Thanks Marilyn, thats really helpful.

Just out of interest do you have any knowledge of NI contributions?  I'm unsure whether the 'stamp' is paid whilst claiming income support and if my client should be paying class 2 contributions.

Thanks again.
Kate 
Terri
  • Member PM.Dip
  • Practice Licence
  • 91 posts
  • # 84209

Hi Kate

Just to add to Marilyn's reply, the HMRC Newly Self-Employed Helpline is who your client needs to call to register her business and their telephone number is 0845 915 4515.  There is also a website you can go to for further information - www.businesslink.gov.uk/taxhelp

Hope this helps and congratulations on the new client


Terri  



  • Terri Homyard AICB CB.Cert PM.Dip (Based in Sheffield)
    Email me at terri@a1-bookkeeping.co.uk
    www.a1-bookkeeping.co.uk 


  • Quote
  • 794 posts
  • # 84211

Hi Kate,
Glad to be of help. The person I know does not have to pay Class 2 NI but they are on disability - I can only assume it will be the same for income support but HMRC will keep your client informed properly what she should do.
Regards,
Marilyn 

  • A clever person solves a problem.

    A wise person avoids it.

    Albert Enstein


  • Quote
kjmcculloch
  • 1159 posts
  • # 84221

Just a wee update, while Marilyn is right that you did get 3 months to register as self employed, this has not been the case for a few years now.  One is required to register as selfemployed immediately on starting to trade.

Kris 
kjmcculloch
  • 1159 posts
  • # 84222

Just a wee update, while Marilyn is right that you did get 3 months to register as self employed, this has not been the case for a few years now.  One is required to register as selfemployed immediately on starting to trade.

Kris 
miaow76
  • 19 posts
  • # 84235

Thanks for the replies.

I'm going to tell her to register asap and let the Jobcentre know at her next appointment and get them to document it (if possible) somewhere in her case notes.  Hopefully this might give her some recourse to refer back to and I'm a big believer in getting the important stuff in writing.

Thanks again
Kate 
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